He’s silver-haired and distinguished. She’s cute and toned. They’re sitting in beach chairs watching the sunset, or maybe walking hand in hand along the water’s edge. They’re relaxed, contented, affectionate. They’re retired.
We’ve all seen this stereotype in retirement planning ads and brochures. But with the baby-boom juggernaut now beginning to roll past 65, the authors of two perceptive new books say that advisors need to help clients prepare more realistically for what retirement will be like.
“I think our profession tends to paint retirement as being too pretty and unrealistic,” says Robert Laura, president of Synergos Financial Group in Howell, Mich., and author of “Naked Retirement.” “It’s often depicted as an idyllic life of leisure filled with contentment and joy. But just like any other phase of life, it can come with a dark side that’s not usually discussed and rarely planned for.”
Laura’s eyes were opened when he was discussing plans for his book with a local doctor. One of the biggest issues with retirees, the doctor said, was addiction.
When Laura did more research, he was stunned by the “hidden epidemic” he discovered in the shadows of retirement. Even though I’ve been a couples therapist for over 40 years and a money coach for more than 25 (and am a boomer myself), what he presents in his book shocked me as well:
- The proportion of older people treated for a combination of cocaine and alcohol abuse tripled between 1992 and 2008, according to the Substance Abuse and Mental Health Services Administration.
- Nearly two million of the 35 million Americans age 65 or older suffer from depression, according to the National Institutes of Health. Depression is the most significant risk factor for suicide among the elderly.
- Suicide rates are highest among people over the age of 65, according to the American Association of Suicidology. In fact, white men age 85 and older have the highest annual suicide rate of any group.
“I’ve been in the retirement planning business for almost a dozen years, and nothing like this has ever come across my desk,” Laura says. “Almost 100% of traditional retirement planning is focused on dollars and cents, instead of preparing clients for what everyday life in retirement may look and feel like, and actually lead to.” The horrifying statistics told him that financial professionals need to help clients prepare for much more than just the financial aspects of retirement.
Step One on Getting Real: Ask These Questions
As Laura points out, the most familiar forms of retirement planning are left-brain-oriented. In “Naked Retirement,” he advocates using the right brain to visualize retirement before crunching any numbers. For every hour invested in traditional retirement planning, an equal amount of time should be spent on discussing issues that will be important during those years, such as replacing one’s work identity, establishing a healthy and active lifestyle, staying socially connected and involved, and resolving relationship wants and needs before they create tension and conflict.
Laura adapted George Kinder’s popular three questions to help clients identify what’s truly important about retirement. Those three questions:
- Imagine that you have enough money to take care of your needs, now and in the future. How would you live your life? Would you change anything?
- Imagine that your doctor says you have only five to 10 years to live. You won’t feel sick, but you’ll never know when death will come. What will you do? Will you change your life? How?
- Now imagine that your doctor says you have only one day left to live. Ask yourself: What did I miss? What did I not get to be or do?
Then Laura asks clients to write out what a perfect day, week and month would look like. For example, are they going to have lunch with their spouse every day? If they’re single, how are they going to stay socially connected to the friends they used to work with? The most common response he hears is “I never thought about retirement like that.”
“That’s what it’s all really about,” Laura says. “Taking a different, more creative and intuitive approach to planning that truly helps clients plan for every aspect of retirement, instead of leaving them holding a binder full of charts and numbers on their first day of retirement.”
To reinforce the shift in focus from dollars and cents to everyday life in retirement, he goes even farther by encouraging clients to prepare a “curious list” and a “saving grace account.”
A Curious List, Not a Bucket List
Depression and addiction in retirees is often provoked by loss of their work identity and feelings of being unproductive or unfulfilled, which tend to lead to diminished self-esteem. Laura feels it’s possible to head off this situation by developing a “curious list”: a list of things that people are curious about and would like to learn more about during their retirement.
“A good curious list should support a balanced retirement, which includes mental and physical health, social activities and financial well-being,” he says. Unlike a “bucket list,” which suggests a definite commitment of time or energy, a curious list simply identifies subjects retirees would like to explore further at some point in their lives. Laura points out that curiosity creates motivation, leading to new experiences and knowledge that can be useful in increasing retirees’ sense of personal worth.
An added benefit of going through this exercise in a group or workshop setting is that it can stimulate participants to brainstorm ideas and add to their own curious lists. Laura suggests that clients compile a list of at least 20 “curious” items before they retire.
The Saving Grace Account: Who Can You Count On?
Much like an emergency cash reserve, Laura’s saving grace account is meant to provide security in the face of a challenge, such as the loss of a loved one, financial hardship, a medical diagnosis or a difficult decision. It consists of identifying three to six people who can be counted on for emotional, physical and spiritual support.
Who can the client turn to when times get tough? Who can they call when they’re feeling down and need cheering up? Who provides wise counsel? Who might they turn to for financial assistance? Who could help them move into a retirement community or nurse them back to health after a knee, hip or shoulder replacement? “This support network may be just as important, if not more important, than a financial savings account,” Laura says.
Current Retirees Need the Same Help
It isn’t just pre-retirees who need help visualizing what they want their retirement to be about. “A lot of people who are already retired attend my Naked Retirement or Retirement Wellness workshops for community groups,” Laura says. “They’ve thought about retirement as primarily a financial event, without considering all the other aspects of their everyday life.” He recommends that these folks, too, write down their responses to the workshop exercises and discuss them with their partner or, if they’re single, with friends.
The exercises in Laura’s workshops are about clarifying what retirees want to do and communicating what they learn with friends and intimates. Getting input and commitment from other people is vital. “For example, you may want to visit the grandkids for a couple of weeks, but it may be disruptive to your children’s lives to stay that long,” he says. “So honest communication about this up front is crucial. If people don’t communicate, they’re going to get tripped up, and it will cause problems.”